European Central Bank puts pressure on Greek banks

ECB squeezes access to cash for Greek banks after Greek finance minister meets with central bank governor Draghi

ECB squeezes access to cash for Greek banks after Greek finance minister meets with central bank governor Draghi

ANKARA - The European Central Bank took measures on Wednesday to limit Greek banks' access to cash.

After a meeting on Wednesday between central bank governor Mario Draghi and Greek Finance Minister Yanis Varoufakis, the ECB announced that Greek bonds, which have a junk-level rating, would no longer be accepted by the central bank as collateral for cash. The measure includes Greek government bank debt. 

Greek banks are starved for liquidity. Without the use of these instruments to obtain cash, the only resource Greek banks have are emergency loans from the European Central Bank.

The banks in Greece will now have to convert about €30 billion ($34 billion) into emergency loans, which cost more, and which require ECB approval.

The ECB said in a statement that the decision was made based on European monetary system regulations.

The Greek Finance Ministry responded with a statement saying that the move would "put pressure" on the ECB and the European Union to reach an agreement with Greece about its debt. 

Varoufakis is to meet with German Finance Minister Wolfgang Schauble this week in an attempt to come to an agreement with his country's largest creditor.

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